The Bank of Japan's hefty monetary stimulus should compensate for any unwinding of the U.S. Federal Reserve's ultra-easy monetary policy, lending some support to markets, analysts tell CNBC.
The Fed Chairman Ben Bernanke gave markets some respite this week when he signaled that his signature bond buying program could continue to mid-next year. This "Bernanke bounce," as it has been dubbed led global equity markets to rally.
But analysts told CNBC, investors shouldn't be fretting over the withdrawal of easy money from the Fed because the liquidity will be replenished by Japanese stimulus.
"Obviously it [tapering] will create a lot of nervousness among markets. But there is something important to bear in mind...at the same time we are seeing several other central banks, such as the Bank of Japan, in the world moving into quantitative easing [QE]," said Herve Lievore, senior economist and investment strategist at HSBC Global Asset Management.
Markets have sold off sharply in recent months, after the central bank started hinting that tapering of its $85 billion per month program was on the cards, with emerging markets bearing the brunt of the sell-off. The MSCI Emerging Markets index has fallen 10 percent since the end of May.
HSBC's Lievore said, although he expected an "erratic reaction" by markets to tapering, which many analysts forecast to happen in September, long-term fears over the withdrawal of the Fed's easy money were overblown.
"Don't forget, by the end of 2014, the BOJ is set to inject $1.4 trillion into the system, so in terms of actual cash in the system, QE tapering is not a big concern. The concern is how markets will translate that into expectations of liquidity," he added.